HomeMy WebLinkAboutStatus Report on Industrial Development AuthorityJanuary 25, 1989
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RECOMMENDATION
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Members of the Industrial Development Authority
Board
Director of Finance
Status Report on Industrial Development Authority
The Authority was formed in 1984 for the purpose of attracting and
retaining business by helping eligible businesses obtain favorable
financing terms. Bonds issued by the Authority are not the financial
obligation of the Authority, but are the responsibility of the
borrower of the debt.
The Authority issued one series of bonds in December of 1984.
Deutsche Bank AG in New York is both the Trustee and Owner of the
bonds. The borrower is Mercedes Benz of North America which used
the $3 million to construct a vehicle preparation facility at 513
Eccles Avenue. All of the money was deposited in a construction
fund which was used for the purpose described in the indenture.
The borrower is up to date in making interest and principal payments,
which are due .annually in December. The- final payment is due_in
1996.
Revisions to the IRS code over recent years have caused Industrial
Development Bond activity to decline dramatically in the United
States. The current rules restrict the use and limit the volume of
Industrial Redevelopment Bonds. It is, therefore, unlikely that the
Authority will be requested to issue bonds on behalf of any other
businesses.
There has been no activity by the Industrial Development Authority in
the last year other then the required annual meeting and
reorganization.
i
Approved• ,~
Pauline A. Marx Jesus Armas ~ ~ 3
Director of Finance City Manager I
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